Ans. LRS is a scheme introduced by RBI as liberalization measure to facilitate Resident Individuals (RI) to remit funds upto USD 2,50,000/- outside India without any RBI permission.

Ans. RIs are eligible to avail benefit of LRS. The person must be a person resident in India as per FEMA. Once an individual is a resident under FEMA, he is eligible to avail benefits of LRS, whether or not he is an Indian citizen.

However, LRS is not available to corporates, partnership firms, HUF, Trusts, etc.

Ans. The following are permissible current account transactions under LRS:
a.Private visit (other than Nepal & Bhutan)
b.Gift or Donation including rupee gift to Non Resident Indian (NRI)/ Person of Indian Origin (PIO), who is a close relative.
c. Emigration
d. Overseas business trip
e. Medical treatment abroad
f. Pursuing studies outside India
g. Going outside India for employment
h. Maintenance of close relatives abroadAny other current account transaction which are not prohibited

Ans. The following are the permissible Capital account transactions under LRS:
a. Opening of foreign currency a/c abroad with a bank outside India
b.Purchase of property abroad
c.Investments in shares, securities, Mutual Funds, etc abroad 
d.Setting up Wholly owned subsidiaries (WOS) and Joint Venture (JV) abroad for bonafide business subject to stipulated terms and conditions
e.Extending loans in INR to NRIs who are relatives as defined in Companies Act, 2013.

Ans. No.

Ans. RI may avail facility in excess of the limit prescribed for purpose of emigration, medical treatment and studies outside, if it is so required by the country of emigration, medical institute offering treatment or the university respectively but subject to certain conditions.
In other cases, prior RBI permission is required to remit funds exceeding USD 2,50,000/-

Ans. The remittances can be made in any freely convertible foreign currency.

Ans. Yes, LRS is in addition to use of International Credit Card. There is no monetary ceiling fixed by RBI for remittances by use of International Credit Card towards meeting expenses while such person is on a visit outside India. However, use of International Credit Card for payment in foreign exchange in Nepal and Bhutan is not permitted.

Ans. There is no restriction on frequency or number of transactions during a FY. However, total amount of foreign exchange remitted through, all sources in India under LRS  during the current FY should be within LRS limit (currently at USD 250,000/-).

Ans. Yes, LRS facility is available to all RIs including minors. In case of remitter being a minor, Form A2 may be required to be countersigned by minor’s natural guardian.

Ans. Since he is carrying on business in India and living in India, he shall be treated as a person resident in India under FEMA. Hence, he would be eligible for availing LRS even though he is not an Indian citizen.

Ans. Since he has left India for employment purpose, he shall be treated as a person resident outside India under FEMA. He would not be eligible for availing LRS even though he is an Indian citizen.

Ans. Remittances under LRS can be consolidated in respect of family members (including minors) subject to individual family members complying with LRS terms and conditions. However, clubbing is not permitted by other family members for capital account transactions such as opening a bank a/c/ investment/ purchase of property, if they are not the co-owners/ co-partners of overseas bank a/c, investment/ property.

Ans. AD will be guided by the nature of transaction as declared by the remitter in Form A2 and will thereafter certify that the remittance is in conformity with the instructions issued by the RBI in this regard from time to time. However, the ultimate responsibility is of the remitter to ensure compliance to the extant FEMA rules/regulations.

Ans. Yes, it is mandatory for the RI to provide his/her PAN for all transactions under LRS made through AD Bank.

Ans. The remittance facility under the scheme is not available for the following purpose:
• Remittance for any prohibited activities such as margin trading, lottery, etc.
• Remittance for purchase of Foreign Currency Convertible Bonds issued by Indian Companies in the overseas secondary market.
• Remittance for trading in foreign exchange abroad.
• Capital Account remittances, directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “Non co-operative countries and territories”, from time to time.
• Remittance directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the RBI to the banks.

Ans. Yes, a RI can give loan to relatives (as defined under the Companies Act) abroad by under LRS as extension of loans is a permissible capital account transaction. 

Ans. No, the investor can retain and reinvest the income earned from portfolio investments made under LRS. However, a RI who has made overseas direct investment in equity shares and compulsorily convertible preference shares of a Joint Venture or Wholly Owned Subsidiary outside India, within the LRS limit, then he/she shall have to comply with terms and conditions as prescribed under FEMA.

Ans. Yes, since the RI has partly utilized the limit of USD 250,000/-, he can gift an additional amount of up to USD 1,00,000/- before 31st March 2019. No further remittances shall be permitted in FY 2018-19 since the LRS limit has been utilized. 

Ans. No. In accordance with regulations governing current account transactions remittance for maintenance of close relative abroad has also been subsumed under the LRS limit. She cannot remit additional amount of USD 50,000/- to her daughter (a close relative) since the LRS limit has been utilized. 

Ans. No. A RI cannot gift to another RI in foreign currency, for the credit of latter’s foreign currency a/c held abroad under LRS.

Ans. i. RI has to approach AD Bank and notify them that he/she would like to engage in an outward remittance under LRS. (The applicant should maintain a bank account with the AD bank for a minimum period of one year prior to the remittance  for capital account transaction)
ii. RI has to furnish Form A2 (declaration form). Under the form RI is required to attest that they have not breached the limit of USD 2,50,000/- per FY and state the purpose of remittance. Form 15CA/CB is not mandatory under LRS transactions.
iii. PAN is mandatory to make remittance under LRS for all transactions.
iv. RI has to submit other supporting documents as required by the AD Bank.

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Funds can be remitted to below mentioned relatives as defined in the Companies Act:

·         Members of Hindu undivided family; or

·         RI’s spouse

·         RI is related to the beneficiary in any of the manners indicated below:

Ans. RI (but not permanently resident in India) who have remitted their entire earnings and salary and wish to further remit ‘other income’ may approach RBI with documents through their AD bank for consideration.

Ans. LRS does not envisage extension of fund and non-fund based facilities by the AD banks to their RI customers to facilitate remittances for capital account transactions under LRS.

However, AD banks may extend fund and non-fund based facilities to RIs to facilitate current account remittances under LRS.

Ans. In a sole proprietorship business, there is no legal distinction between the individual / owner and as such the owner of the business can remit USD up to the permissible limit under LRS. If a sole proprietorship firm intends to remit the money under LRS by debiting its current account then the eligibility of the proprietor in his individual capacity has to be reckoned. 

Ans. A RI is permitted to make a rupee loan to a NRI/PIO who is a close relative of the RI (as per the Companies Act, 2013) by way of crossed cheque/ electronic transfer as per the stipulated conditions.

Ans. A RI can make a rupee gift to a NRI/PIO who is a close relative of the RI [relative’ as defined in Section 2(77) of the Companies Act, 2013] by way of crossed cheque /electronic transfer. The amount should be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would be within the overall limit of USD 250,000 per FY as permitted under the LRS for a RI. It would be the responsibility of the resident donor to ensure that the gift amount being remitted is under the LRS and all the remittances made by the donor during the financial year including the gift amount have not exceeded the limit prescribed under LRS.

Ans.   Yes, a RI can lend money in Rupees to his NRI relative (as defined by Companies Act) by way of crossed cheque /electronic transfer within the overall limit of USD 2,50,000/- per FY under LRS. The loan should be interest free and have a maturity of minimum 1 year. Repayment of loan shall be made by way of inward remittances from outside India or by debit to NRE/NRO/FCNR (B) a/c of the NRI relative or out of the sale proceeds of shares/securities/immovable property against which such loan was granted.   

Ans. The loan in Rupee shall be utilised for meeting the NRI relative’s personal requirements or for NRI relative’s own business purposes in India. It shall not be utilised for any of the activities in which investment by a NRI is prohibited, namely:

• the business of chit fund, or
• Nidhi Company, or
• agricultural or plantation activities or in real estate business*, or construction of farm houses, or
• trading in Transferable Development Rights.

*restriction on real estate does not include development of townships, construction of residential/ commercial premises, roads or bridges.

Ans. It would be the responsibility of the lender (i.e. RI) to ensure that amount of loan is within the limits prescribed under LRS during the FY.

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Funds borrowed in rupees from NRI close relative shall be utilized by Resident Indian for his own business purpose only other than certain specified businesses*. He is not permitted to utilize the loan funds for any investment, whether by way of capital or otherwise, in any company/ partnership firm/ proprietorship concern or any entity, or for relending.
* the business of chit fund, as Nidhi Company, agricultural or plantation activities or real estate business; or construction of farm houses, or trading in Transferable Development Rights. 
Provided that RBI may permit such resident entities/ companies to use such borrowed funds:
(a) For on lending/ re-lending to the infrastructure sector; or
(b) For keeping in fixed deposits with banks in India pending utilization by them for permissible end-uses.

Ans. Yes, NRI is permitted to avail loan from AD Bank in Rupee subject to certain specified restrictions and:
-against the security of shares and others held in name of NRI, or
-against security of immovable property (other than agricultural land / plantation property / farm house) held by NRI in accordance with RBI regulations

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Ans. A RI may borrow in Rupee from NRI relative on non-repatriation basis after satisfying the following terms and conditions:
-Loan shall be received by way of inward remittance from outside India or out of NRE/ NRO/ FCNR (B)/NRNR/NRSR a/c of NRI maintained with an authorised dealer or an AD Bank in India.
 -The period of loan shall not exceed 3 years and rate of interest shall not be more than 2% above the bank rate prevailing on date of availment of loan.
-The repayment of loan amount along interest thereof shall be made only to the NRO account of the NRI
-The borrowed amount is not permitted to be repatriated outside India.

Ans. Yes, an individual resident Indian can borrow in foreign currency, a sum not exceeding USD 250,000/- or its equivalent from his close relatives NRE outside India, subject to following conditions:
 -minimum maturity period of loan is 1 year;
-loan is free of interest; and
-amount of loan is received by inward remittance in free foreign exchange through normal banking channels or by debit to NRE/FCNR a/c of NRI. 

Ans. She can freely avail loan/ overdraft against securities of her NRO/NRE FDs in India without any monetary ceiling subject to end-use conditions as specified under FEMA.

Ans. Third-party being RI, firms or companies resident in India can avail loan/overdraft against security of NRO deposits for personal/business purposes, subject to stipulated terms and conditions.However, loan amount cannot be utilized for relending, agricultural/plantation activities or real estate business. 

Ans. Yes, NRI is permitted to acquire loan in INR from the Bank till the extent of 90% of the purchase price in INR of the ESOPs or Rs. 20 lakhs per NRI employee whichever is lower. The loan amount shall be directly paid to the company and should not be credited to NRI’s non-resident a/c in India. Additional conditions have been laid down by RBI for the same.

Ans. It is clarified that use of credit card in India by a person resident outside India shall not be deemed as borrowing or lending in rupees.

Ans. An AD Bank may allow continuance of loan/ overdraft granted to a person resident in India who subsequently becomes a person resident outside India, subject to following terms and conditions:
• AD Bank is satisfied, according to his/ its commercial judgment, about the reasons to continue the loan or overdraft;
• The period of loan or overdraft shall not exceed the period originally fixed at the time of granting the loan/ overdraft;
• So long as the borrower continues to a remain a person resident outside India, the repayment shall be made either by inward remittance from outside India through normal banking channels or from the funds held in NRE/ FCNR(B)/ NRNR/ NRO/ NRSR a/c of the borrower.

Ans. In case INR loan was granted by a person resident in India to another person resident in India and the lender subsequently becomes a non-resident, the repayment of loan by the resident borrower should be made by credit to NRO a/c of the lender maintained with AD bank in India, at the option of the lender.

Ans. No. As per FEMA provisions, Indian Company is not permitted to avail loan from NRI. Alternatively, NRIs can provide deposits to Indian company or invest in Non-convertible Debentures offered by the Company.

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Relative shall cover the following:

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Payment can be made by NRI / OCI only out of funds remitted to India through normal banking channels or funds held in NRE / FCNR / NRO a/c maintained in India. Payments cannot be made through travellers’ cheque or foreign currency note or any other mode.

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NRI/OCI who has acquired immovable property in India under general permission is not required to file any documents with RBI.

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There are no restrictions on the number of immovable properties that can be acquired. However, they can freely repatriate sales proceeds of only 2 residential properties outside India. For repatriation of sale proceeds from sale of more than 2 properties, one may be subject to USD 1 Million Scheme.

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Yes, a person resident outside India (NRI/OCI) can inherit and hold immovable property in India from a Person resident in India or a Person resident outside India provided such immovable property was acquired in accordance with the provisions of Foreign Exchange laws in force.

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Yes, he is permitted to inherit agricultural land property from his father who was also a non-resident provided the father had acquired the property in accordance with the Foreign Exchange laws in force.

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The NRI/OCI may transfer agricultural land/ farm house/ plantation property in India, by way of gift or sale to a person resident in India and who is a citizen of India.

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Yes, he may sell to a person resident in India/ NRI/ OCI.

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Yes, he is eligible to sell an agricultural land to a person resident in India, even if the same was purchased by him while he was a Resident.

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No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India. But, he may take immovable property on lease provided the period of lease does not exceed five years. In such cases, there is no requirement of taking any permission of or reporting to RBI.

However, he is permitted to acquire one immovable property (other than agricultural land / plantation property / farm house) jointly with his spouse:

·       Provided the acquisition of such property is in accordance with the provisions of Foreign Exchange laws in force; and

·       The spouse is NRI or OCI and otherwise not prohibited from such acquisition; and

·       Their marriage should have been registered and subsisted for a continuous period of not less than two years immediately preceding the acquisition of such property.

Ans.

Yes. Mr R, a foreign national who is a ‘person resident in India’ as per FEMA can acquire immovable property in India but he would have to obtain the approvals and fulfil the requirements, if any, prescribed by other authorities, such as, the State Government concerned, etc. However, Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong or Democratic People’s Republic of Korea (DPRK) would require prior approval of RBI.

Ans.

Yes. Mr P, an OCI Cardholder who is a ‘person resident in India’ as per FEMA can acquire immovable property in India even after being a citizen of China since the prohibition on acquisition of immovable property in India by citizen of certain countries as specifies in FAQ k shall not apply to an OCI cardholder.

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Yes. Mr. M, Foreign National who is a citizen of China can acquire an immovable property in India under lease for three years. The prohibition on acquisition of immovable property in India by citizen of certain countries as specifies in FAQ k shall not apply to lease contracts, not exceeding five years.

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Yes. Mr. M, Foreign National who is a citizen of China would require RBI approval for acquisition of immovable property in India under lease for seven years.

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Yes, NRIs/OCI can freely acquire immovable property (residential and commercial properties only) by way of gift either from a person resident in India or a NRI or OCI who is a relative defined in section 2(77) of the Companies Act,2013. However they are not permitted to acquire an agricultural land / plantation property / farm house in India by way of gift.

A foreign national of Non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift. RBI permission may be required for such acquisition by a foreign national of Non-Indian origin.

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Residential /Commercial property: NRI / OCI may gift residential/ commercial property to a person resident in India, NRI or OCI who is a relative as defined in section 2(77) of the Companies Act, 2013.

Foreign national of non-Indian origin requires prior approval of RBI for gifting the residential / commercial property.

Agricultural land / a plantation property / a farm house: NRI / OCI can gift agricultural land / a plantation property / a farm house only to a person resident in India who is a citizen of India. A foreign national would require prior approval of RBI.

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Yes, NRI/ OCI are permitted to obtain housing loans from AD Bank, registered NBFC and other financial institutions as specified from RBI from time to time.  

The loan shall be subject to the policy laid down by the Board of Directors of the AD Bank and in compliance with RBI guidelines or RBI terms and conditions. The borrowed funds are not to be used for restricted end uses such as under:

a.    In the business of chit fund or Nidhi Company;

b.    Investment in capital market including margin trading and derivatives;

c.    Agricultural or plantation activities;

d.    Real estate activity or construction of farm houses; and

e.    Trading in Transferrable Development Rights (TDR), where TDR shall have the meaning as assigned to it in the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2015.

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Yes, subject to certain terms and conditions as prescribed by RBI from time to time. Further, the borrowed funds are not to be used for restricted end uses as mentioned in FAQ above.

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Yes, he may repatriate sale proceeds of immovable property subject to below conditions:

·    Amount to be freely repatriated should not exceed amount paid for acquisition of residential/ commercial property in foreign exchange, received through normal banking channel or by debit to FCNR a/c or NRE a/c.

·   In case of residential property, sale proceeds are freely repatriable upto 2 such properties. Repatriation of sale proceeds in excess of 2 such properties shall be under USD 1 million per FY.

·     Sale proceeds of residential/ commercial property in India acquired by way of debit to NRO a/c cannot be freely repatriated and sale proceeds should be credited to NRO a/c only. However, such sale proceeds can be transferred from NRO a/c to NRE a/c/ overseas a/c subject to the limit of USD 1 million per FY.

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There is no requirement of minimum holding period applicable for sale of such property.

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The sale proceeds of immovable property acquired by way of gift should be credited to NRO a/c only. From balance in NRO a/c, NRI/OCI may remit up to USD 1 million, per FY, subject to satisfaction of AD Bank and payment of applicable taxes.

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NRI may hold bank accounts in India with AD or AD bank. The AD in India may accept deposits from NRI under the following schemes:

                     i.     Non-Resident (External) Account Scheme (NRE A/c) in Indian Rupees

                    ii.     Non-Resident (Ordinary) Account Scheme (NRO A/c) in Indian Rupees

                   iii.    Foreign Currency (Non-Resident) Account Banks Scheme (FCNR (B) A/c) in Foreign Currency

                  iv.      Special Non-Resident Rupee Account (SNRR A/c)

  Features of various Deposit Schemes available to NRIs:

¹ For the purpose of the said FEMA regulation, NRI means a person resident outside India who is a citizen of India.

² For the purpose of the said FEMA regulation, PIOs do not include nationals of Pakistan, Bangladesh or such country as may be specified by Government.

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Opening of bank accounts by individuals/ entities of Pakistan nationality/ ownership and entities of Bangladesh ownership requires prior approval of RBI.

However, individuals of Bangladesh nationality can open an NRO A/c subject to the individual(s) holding a valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO) concerned.

Further, citizens of Bangladesh/Pakistan belonging to minority communities in those countries, namely, Hindus, Sikhs, Buddhists, Jains, Parsis and Christians residing in India and who has been granted Long Term Visa (LTV) or whose application for LTV is under consideration by Central Government, are permitted to open only one NRO A/c with AD. Such citizens who have opened NRO A/c and whose application are under consideration are required to renew the A/c at six monthly interval and should hold valid visa.

Ans. Yes. NRO a/c can be maintained jointly with a resident of India on former or survivor basis. On the other hand, NRE and FCNR a/c can be maintained jointly with resident relative (as per Companies Act) only i.e. a resident non-relative cannot be a joint holder. 

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Relative means and shall cover the following:

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·     Repatriation outside India of funds held in the FCNR (B)/NRE/NRO A/c under any circumstances other than to the account holder himself.

·        Payment by way of gift to a resident on behalf of the account holder.

·   Transfer funds from one FCNR (B), NRE, NRO A/c to another FCNR (B) A/c, NRE, NRO A/c respectively.

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No. NRE A/c cannot be opened by resident POA holder in India on behalf of NRI.

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Yes. Relatives (as per Companies Act) who are NRIs are permitted to be joint holders in existing / new resident bank accounts with the resident account holder on “Either or Survivor” basis as per the conditions prescribed.

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Yes. Under FEMA regulations, NRIs can avail loan from Banks for himself against the collateral of funds held in FCNR (B) and NRE A/c without any ceiling subject to usual margin requirements. The loan amount can be utilized by NRI only for the following purposes:

·         Personal purposes or for carrying on business activities. The loans cannot be utilized for the purpose of ‘relending’ or for carrying on agriculture, plantation activities or for investment in real estate business.

·         Capital contribution in Indian firms / companies subject to relevant regulations.

·         Acquisition of flat / house in India for his ‘own’ residential use subject to relevant regulations.

Further, loan can be availed in favor of third party i.e. RI/Firms/Company in India against the security of fixed deposits held in the A/c, there should be no direct or indirect foreign exchange consideration for the non-resident depositor agreeing to pledge his deposits to enable the RI/Firms/Company to obtain such facilities.

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Yes. Under FEMA regulations, loan can be availed in favor of the A/c holder (NRI in this case) or to third party i.e. RI/Firms/Company in India against the security of fixed deposits held in NRO A/c. The loan can be utilized for personal and business purposes except for the purpose of ‘relending’ or for carrying on agriculture, plantation activities or for investment in real estate business.

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Yes. NRIs can avail loan from branches/correspondent bank outside India in his favor or request the branch/correspondent bank outside India to provide loan to a third party outside India. However, the amount shall be utilized for bonafide purposes except for the purpose of ‘relending’ or for carrying on agriculture, plantation activities or for investment in real estate business.

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AD Banks may at their discretion/ commercial judgment allow over drawings in NRE A/c up to a limit of Rs. 50,000/- subject to the condition that such over drawings together with the interest payable thereon are cleared/repaid within a period of 2 weeks, out of inward remittances through banking channels or by transfer of funds from other NRE/ FCNR (B) A/c.

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Yes. Remittance of funds of deceased account holder to NRI nominee is permissible. However, request from a resident nominee for remittance of funds outside India, RBI approval shall be required.

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Ans. Yes. Foreign tourists of non-Indian origin during their short visit to India can open a NRO a/c (Current / Savings) with AD Bank. Further, the balance in the NRO account may be paid to the account holder at the time of his departure from India provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon.

Ans. Funds remitted from outside India through banking channels or funds obtained by sale of foreign exchange brought by tourists to India can be credited to NRO a/c.

Ans. Yes. Tourists can freely make local payments through NRO a/c.

Ans. AD Banks have been allowed to convert the balance in account for payment to the account holder at time of departure from India into foreign currency, provided the account has been maintained for a period not exceeding 6 months and account has not been credited with any local funds, other than interest accrued thereon.

Ans. Yes. Foreign nationals employed in India holding valid visas can open and maintain a resident Rupee a/c in India subject to conditions.

Ans. Yes, AD Banks can remit proceeds of resident a/c opened by a foreign national resident in India (subject to payment of taxes). However, AD Banks should ensure that the funds to be repatriated outside India were either received from abroad or they are repatriable in nature or permissible by RBI.In order to facilitate such foreign nationals to collect their pending dues, AD Banks may, permit foreign nationals to re-designate their resident a/c maintained in India as NRO a/c on leaving the country after their employment to enable them to receive their pending bonafide dues, subject to conditions.

Ans. A person coming to India from abroad can bring foreign exchange without any limit. However, if aggregate value of foreign exchange in the form of currency notes, bank notes or traveller’s cheques brought in exceeds USD 10,000 or its equivalent and/ or the value of foreign currency alone exceeds USD 5,000 or its equivalent, it should be declared to Customs Authorities at the Airport in Currency Declaration Form (CDF) on arrival in India.